Neotel iscommitted to the lowering of interconnection rates, with the objective of increasing competition in South Africa’s telecommunications market – but feels strongly that any decisions made on interconnection tariffs must be in the best interest of the end-user and that there are mechanisms in place to ensure that consumers benefit from the reductions.
This is according to Ajay Pandey, MD and CEO of Neotel, who says: “Asymmetric regulation, including asymmetric interconnection tariffs, have a specific role to play in driving competition.
“As the innovative telecommunications challenger, the need for asymmetry has always been part of our communications to the regulator since day one. We believe it provides an opportunity for new entrants in a market to immediately start driving competition.”
Cell C’s call for asymmetric interconnection tariffs is welcomed and fully supported by Neotel in that it will stimulate competition. However, the objective behind this type of tariff structure is generally to provide a “leg up” to new entrants in the market, says Pandey.
“A new entrant is typically someone who has recently entered the market and is an operator who is actively investing in growing its network to compete against incumbents. Asymmetrical interventions should typically be designed for new entrants, rather than targeted at market share."
Pandey also believes that while a drop in interconnection tariffs is overdue, the industry and regulators must not lose sight of the other issues impacting the sector and the importantly, the impact these have on new market players.
“There are a number of issues that will remain until long after interconnection prices are dropped, unless they are addressed directly,” he says.
These include issues around controlling market dominance, carrier pre-select, number portability, spectrum and numbering assignment and many environmental regulation issues faced whilst building a network.
At the centre of any intervention, he says, must be an initiative to ensure the support and viability of the regulator to ensure that the other key challenges facing new entrants can be swiftly addressed.
“That said, we are positive that this move will benefit the consumer, provided the right mechanisms are put in place to ensure that the benefits of any reduction in interconnection is passed through to the consumer,” says Pandey.
“The benefit of being agile and customer driven, means that as Neotel we can already make a commitment to our customers that should the interconnection fees be reduced, we will cut our standard rates."